Talking With Friends About Money

We had dinner last weekend with our friends Pierre and Marcela. The food was fabulous. The conversation was good, too. Much of the time, we talked about money.

If I were a rich man “If we were rich, I wouldn't change a thing in my life,” Marcela said. “Except the food. If we made ten times what we make now, I'd keep everything else the same, but I'd eat like this every night.” The rest of us murmured our agreement over mouths full of bread, cheese, and olives.

“If I made ten times what I do now, I don't think I'd change anything, either,” I said, and saying it made me realize just how fulfilling my life has become.

“I'd travel more,” Pierre said, taking a sip of wine. “I'd like to take four vacations a year instead of one.” The conversation turned to their family's recent vacation, a trip to visit Pierre's mother in France on the occasion of her 80th birthday. We talked about French food and about the vagaries of Belgian language. And then we talked about credit card bills.

Ask and you shall receive “I forgot to pay a credit card bill before I left for France,” Marcela said. “When we got back, there was a $15 late fee. Now I knew the bill was late, and I knew that I deserved the late fee, but I was in a bad mood that day, so I called customer service.”

“‘Isn't there anything you can do for me?' I asked. I didn't play the ‘good customer' card, and I didn't threaten to cancel. I just said, ‘Isn't there anything you can do for me?'”

“The customer service rep put me on hold for a couple minutes, and when he came back, he told me they could cut the late fee to $7.50. Well, at that point I figured if they were willing to cut in half, they could certainly cut it all the way, and I told him so. He put me on hold again. Turns out they agreed to waive the entire fee!”

We all laughed at Marcela's brashness. “It was a perfectly civil conversation,” she said. “And the call saved me $15.”

“I figure it's karma,” Marcela said. “Think of how many times the banks overcharge us and we never know about it. If you catch one error, you can bet they're making the same error on thousands of other statements. They make a fortune off that.”

“It's not just the banks,” I said, taking another slice of bread. “When we moved to Portland, I discovered that the phone company was charging me for two DSL modems. They did so for months before I noticed. When I called to complain, they were reluctant to credit my account for their error. They made out like it was my fault.”

Many happy returns The main course was ready, so we moved outside to eat our fresh pasta with prosciutto, tomatoes, and asparagus. While we ate, I talked about my newfound love of running. “You'd think it would be cheap, but there's always ways to spend money on a hobby. I just bought a fancy heart-rate monitor, for example. I also ordered a kit to attach it to my bike, but Amazon sent and billed me two of them. Now I have to return one. I hate returning stuff.”

“When I was a boy in France,” Pierre said with his marvelous accent, “it was impossible to return something. Even if it was broken, you couldn't take it back. The shopkeeper would accuse you of being clumsy, of breaking it yourself. After being here for a while, I finally can return things. I bought a radio recently that did not work. I returned it, and it was very simple. Nobody cared. It was not like that when I lived in France.”

Everyday wisdom I learn just as much by talking about money with my friends as I do from reading personal finance books. Even when our topics are mundane, the context and the setting for these conversations somehow make the subject more real, more alive. Here are just a few examples:

How often do you discuss money with your friends? Does it depend on the friend? Do you ever talk about saving and investing? Are certain subjects (such as salaries) taboo? And, most of all, do you find these conversations as rewarding as I do?

In 2006, J.D. founded Get Rich Slowly to document his quest to get out of debt. Over time, he learned how to save and how to invest. Today, he's managed to reach early retirement! He wants to help you master your money — and your life. No scams. No gimmicks. Just smart money advice to help you reach your goals.

Sounds like it was good conversation (and food!). I have a best friend that I share most of our financial details with – salary, debt, retirement balances, etc, but most casual friends and I just discuss things in general terms. Most of the taboo subjects stay that way in general company, but it’s good to have one or two trusted friends to bounce numbers off just for comparison sake.

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April D

11 years ago

I agree with Marcela 100 percent. Even if we were richer, my husband and I would still want to build the modest home we have in mind. We’d still do the same things, but yeah, we’d travel more, and drink more Brunello! Great food and travelling the world…there’s nothing better.

I don’t talk about money with my friends because they don’t get where I’m coming from, and it just feels unpleasant and preachy.

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Nicole

11 years ago

I think that one positive result of this economic crisis is more people talking about money. Communicating about anything like money (but insert jobs or relationships or anything else important there) can only help us all be better for it. . . You know, until a collective intelligence is invented. Cheers to friends!

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B Smith @ Wealth and Wisdom

11 years ago

Some of our friends are uncomfortable with it because it causes so much stress in their lives. They already know our stance on things. We make more money (almost twice as much) but are much less willing to spend. In their case it is a topic to be avoided. A lot of our neighbors are the same way. You hear a couple whispers of “Dave Ramsey” every once in a while. No one talks about saving or being frugal. I think much of it is that they want to pretend to have more money than they do. If they drive… Read more »

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Sam

11 years ago

I’m still of the mind that money is a pretty personal. But, I do discuss things like investing, saving, debt with close friends and family. I also told friends that Mr. Sam and I were paying off all our unsecured debt and have told friends about Ramsey’s Total Money Makeover (and I ‘ve given the book to my best friend). I was on a recent trip with one of my best friends and she talked about wanting to buy a new car (sedan) but she was going to keep her light SUV too. My friend is single, uses public transporation… Read more »

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Brian

11 years ago

I agree that more people are talking about money these days, but my wife and I find it hard to do. Most couples we know don’t share the same beliefs about money. They don’t save or invest, they buy lots of ‘stuff’ on credit, they think owning a house is the “thing you have to do” to build wealth, and debt doesn’t appear to bother them at all. I have found, however, that I can speak with older people about it freely. I think many people in their 40’s-50’s wish their generation had been more open about money conversations. I… Read more »

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Marie

11 years ago

Most of my family, my husband and parents included, are teachers. Because their pay is public record, they are candid about salary in a way that makes me, as a private sector employee, uncomfortable. It’s a strange dynamic.

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partgypsy

11 years ago

In general no, it seems in the US that money issues are still more personal than talking about sex. It’s something that I am curious about, such as a couple who has a much more home than you would think they could afford from their income. Are they in debt, or did their parents help them out, or are they really great at saving? But you can’t ask. There are a couple people I talk to, a friend who has done well investing. He lives modestly, lives in a house he has completely renovated by himself, and has always put… Read more »

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betsy - Money Changes Things

11 years ago

I am middle-aged and well-educated; this correlates to being financially secure and having friends who are as well. There is a general rule I’ve noticed: people never like to come out and say they are financially secure. But it is referenced all the time. One game I notice is that people complain about how much things cost – mostly these items are, in fact, luxuries, so complaining about how much it costs to fix your Lexus is in fact strutting your stuff. Likewise affluent people talk about investments, without ever really talking about meta-money issues. I think this is largely… Read more »

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Heidi

11 years ago

I discuss money with friends all of the time. As a banker, I got used to asking really personal questions about other people’s finances and now nothing money-related (mine or others) seems sacred. Our closest friends have opted to “drop out” of mainstream life, sold their home, quit their jobs, and moved to a community that fits their organic, sustenance-only lifestyle. He now works as a day laborer, working odd jobs, while she stays home with the kids full time. These are smart, college educated people who have chosen not to bow to convention and are finding their own way.… Read more »

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Thomas Murphy

11 years ago

I don’t think money issues are top secret between friends. Asking friends about money can give you some ideas about how to manage your money with more care or maybe they can use the ideas you give them.

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Rich

11 years ago

I fortunate enough to get a really good job the semester before I graduated. Now I’m making $10-15k more than some of my friends they are and my debt is firmly under control. The difference in financial situation makes it somewhat awkward to discuss finances with them. They’re worried about paying off student loans and I’m worried about balancing how much I put in my 401k, the interest I can earn with my ING account and how much I save for a house. As for salaries, part of me really wishes they were discussed more freely. If they were, I’d… Read more »

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J.D.

11 years ago

I was thinking more about this while I was at the gym this morning. I realized that it’s only certain couples that we can discuss money with. For some, it is taboo.

It seems to me that the friends it’s easiest to discuss this kind of thing with are those who are in similar circumstances to us. If somebody’s much more successful, or if somebody’s doing much worse, then financial issues can be awkward. But friends at a similar level seem to be able to exchange hints and tips and ideas.

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FranticWoman

11 years ago

Finance is not something my friends talk about ever really. I’m forthcoming to a point – but I also make less than them (not sure that is a correlation). I pick up things they randomly mention and that is the only way I have any kind of picture of their financial health. No one except my best friend has ever told me their salary (although I can deduct roughly what some people make). Salary stating seems totally taboo. Overall, what I have picked up on with my range of friends in my age group: little or no liquid savings; almost… Read more »

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Elizabeth

11 years ago

Maybe it’s because we’re young, but finances are a big topic of conversation with our friends. Two of our friends have been following the Dave Ramsey plan for about six months and have paid down $27,000 in debt! It’s so exciting to celebrate with them as they see their student loans diminish. It’s also very freeing to have friends with whom we can be transparent about money. In our group of friends, it’s okay to suggest that we spend time at someone’s house and watch a DVD instead of going to the theatre because we’re nearing the end of the… Read more »

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Marie

11 years ago

ITA, J.D., that similar circumstances make for easier conversation. Several of my friends married into money (all males, actually!) and whenever investing or career advancement comes up in conversation, even at a general level, the atmosphere is awkward.

Those who have circumstances like our own (paid for our own schooling, work full-time, etc.) engage in those topics much more readily.

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jrr

11 years ago

You should write more posts as stories – they’re fun to read.

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Chad @ Sentient Money

11 years ago

I have a large number of close friends and personal finance discussions with close friends is done a lot.

I love discussing finance. Though it’s more “where is oil headed”, as opposed to “how to budget.”

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kick_push

11 years ago

the topic comes up with my big group of friends.. usually by accident (obviously because it is an important) topic.. it can get interesting because we all come from different backgrounds, interests, incomes, etc..

topics could range from different hobbies, cars, gas prices, business ideas, etc.. i try to learn from them and see where i can make improvements in my own life

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Michael

11 years ago

Really, you learn much more from those you (J.D. Roth) know than from personal finance books. It shows in your posts. Your PF book reviews say nothing new. This did.

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Jessica G.

11 years ago

I just had to say that reading this post REALLY made me miss french food.

I still don’t understand how I could be in Paris for a week, ate and drank like I did, and lose 5 pounds.

*sigh* so good…

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allen

11 years ago

What i find annoying is: I make out better financially better then most of my friends. A number of them even sell their bodies for drug testing, they are so baddly in need of money. I haven’t even finished college yet (i need to go back, if only part time!), but i landed a job that pays me pretty darn decently. I’m putting $ aside for retirement in my 401(k), i am TRYING to build an emergency fund, &c. However, i’m making over ten thousand below the county average. I live on my own, and i’m single, so i have… Read more »

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Richie

11 years ago

Why is discussing salaries, and finances taboo? My friends can see that I drive an old car and live in a rented house, they can tell I don’t make a ton of money. Why should it be taboo to tell them exactly how much I make? Why should it be considered a secret how much I actually pay for major purchases? Why should it be taboo for somebody to ask?

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Cindy of www.MendYourMoney.com

11 years ago

It’s about time we threw this old-fashioned notion of money secrecy out the window. It’s just not serving us anymore. People are hiding behind it and trying to show a good face to their friends. And the friends are struggling, too. Let’s all be brave and bring up money the next time we are out with friends and see what happens.

Cindy Morus

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Matthew

11 years ago

Its funny to me that so many of the people responding today think talking about certain financial aspects shouldn’t be taboo…however normally the responses on here do not mention how much they make when referring to their ‘personal stories’ and give reference that they are doing ‘pretty well’ salary wise and putting a ‘decent amount’ into emergency fund and a ‘fair share’ into my 401K

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Michelle

11 years ago

I discuss finances pretty openly with my best friend/roommate. As a couple years out of college and with salaried jobs, it’s easy to talk about how much is left over after those student payments, etc, food budgeting, etc. It’s nice to be able to say “I don’t want to spend more than $25, but let’s do a night on the town!” or joke about how it’s a ramen week. I’m more ahead of a lot of my peers at having a roth IRA/Simple IRA. A huge part of that is because I spent 2 years working strictly with cash (getting… Read more »

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mollyh

11 years ago

I have one very good friend with whom I can discuss all things money related, including salaries, account balances, goals and failings. It so happens that this friend is blind, and a lot of what we talk about revolves around how she can make solid financial decisions and still retain accessibility and control. I’ve tauted the wonders of ING (my husband and I have several accounts there split into different “buckets” for our different savings goals); however, because ING’s login security is so visually based, she cannot use them. Another discussion we recently had is the ridiculous way that Social… Read more »

I am completely open about the fact that I have debt and the fact that I’m working to to pay it off. Most of my friends are not out in the ‘real world’ yet however, and so it’s not something that comes up often.

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Lola

11 years ago

A few years ago, after realizing I wouldn’t change anything in my life if I had more money, I asked my husband, “What would you do if you were a millionaire?” He thought for a while and answered, “I think I’d buy a cordless mouse” (or something to that effect). I was shocked and said, “Wait! You mean that, if you were a millionaire, you’d buy something you could afford to buy now, if we really wanted it? Come on, be more creative. What would you really buy?” And he thought for a while longer and finally answered, “Well, there… Read more »

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Richard Haven

11 years ago

No, karma is taking responsibility for your own actions. You knew you were late paying your bill and you begged them for a gift; you did not deserve it.

One can justify anything by claiming it is an offset to what “they” are “always” doing.

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etw

11 years ago

My best friend of 12 years and I talk about money at least every other phone call. Only a few years ago he was $30k in credit card debt, with only a pimped-out Ford Explorer and some pleather furniture to show for it. Flashforward to now, after him being married to a very frugal (actually very cheap) woman he’s changed his ways. Instead of debt he’s now got well over 100k in his TSP, maxes out his IRA every year, pays double mortgage payments every month, and generally pinches a penny until it screams. I use how he is and… Read more »

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Sara

11 years ago

We love to talk personal finance, but it’s typically only with people who are roughly in the same situation we are (or once were). That way, it feels more like collaborative strategizing than comparing or competing.

It’s wonderful to talk with people who are going through the same issues we are, but it can also be limiting. I’m sure we’d be more interesting and better educated if we talked money with people in wildly different situations.

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Scott

11 years ago

The topic of money and budgets always seems to come up with my guy friends. It’s interesting that they are very open and like to exchange ideas about savings and budget ideas. Men talking to men about money seems to be a lot easier than a man talking to another woman. It shouldn’t be, but it is.

I really enjoy reading your blog posts. Wonderful detail.

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Michiko

11 years ago

There are a few friends with whom I have regular conversations about money. We generally share the same philosphies with regards to spending, saving, and debt. I know that we all own one or two credit cards, and we’re mindful about how much debt accumulates on those cards. However we don’t see spending as some kind of evil. Nor do we squirrel away every nickel and dime.

I know that we all share the pride of knowing that we are self sufficent women.

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Tina

11 years ago

I’m going to be in Portland next week, where were you eating? I love Italian and would love to try someplace new. I also love your blog, it inspires me and I read it twice a day!

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Hazzard

11 years ago

I absolutely LOVE talking to friends about money and personal finance. It’s amazing how many people I’ve ended up surrounding myself with that are responsible with their money. Obviously there are also those that we are friends with that aren’t good at managing money but they are certainly still our friends. Deep down I do find myself wondering how they are going to make out later in life though……

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Dave

11 years ago

I loved Lola’s story about her husband and the cordless mouse. I think it is Sheryl Crow who says in one of her songs that happiness is not having what you want, but wanting what you’ve got. How profound is that? I don’t talk to anyone about money (outside of my wife, of course) I was brought up to believe that this is intensely private and never, ever to be discussed in detail. It’s one thing to talk in general terms, but specifics – “I make $x/year” is just not talked about. Most of the companies I’ve worked for have… Read more »

I would note (to an above commenter) that in the U.S. threatening to fire someone for discussing salary with others is illegal, and you can get the National Labor Relations Board to sue them for it. It is protected speech under the same laws which protect union organization, as is any other discussion with other co-workers with the goal of improving working conditions.

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anjjol

11 years ago

Just another point about Marcela’s experience with the late fee: what I would be watching is the interest rate on that card. Banks use late payments as a convenient excuse to jack up that rate. They can easily get that $15 and much more just by increasing the interest rate on the card. (I speak from experience unfortunately!)

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J

11 years ago

Oy. I don’t know if it’s my group of friends or what, but money is rarely discussed, and when it is, it becomes a subject of anxiety.

I think it’s what you said, JD: You can only have the conversation with people who are in similar circumstances. Otherwise, the subject becomes fraught with a strange sort of “Keep Up With The Joneses” tone, even if the group in question isn’t prone to that sort of thinking to begin with.

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Ro

11 years ago

Interesting post! I guess I’m one of the ones who will only discuss finances in general without getting into specific details. My husband and I are at a point in our life where we should not be struggling as hard as we do, and it is embarrasing.

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Cara

11 years ago

I discuss details only with my best friend; we share salary info, bonuses, raises, interest rates, everything. I find it incredibly helpful, but I would not be so open with other friends. As JD has said many times on this blog, money matters are not strictly logical, emotion plays a big part. If you agree with that (as I do), do you really think that telling friends how much you make, or how much debt you carry, won’t (possibly) have uncomfortable consequences?

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blood, debt, and tears

11 years ago

Husband and I discuss with another couple because we are both digging ourselves out of debt. I’m hoping some of their frugality will rub off on us! We don’t discuss our salaries with any of our other friends. Mostly we just say, it’s not in our budget and move on from there if someone asks…

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J Dawg

11 years ago

Me and my friends are just now getting to talk about money but we have a definate rift because some of us are Dave Ramsey “no debtors” and others are Trump “leverage is your friender”.

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Nottheangel

11 years ago

I discuss it with friends if they ask. I find they rarely reciprocate though. My friends are all in wildly different situations and money talk often gets awkward.

I personally find other people’s situations fascinating. Like my friend who makes a quarter mil a year but his wife still has student loans and credit card debt because he believes his money is “his”. Sigh.

I talk to my mother about money all the time. She is a huge inspiration and has been a great saver/budgeter all my life.

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William Stewart

11 years ago

JD, that’s so true about credit card late fees. I’ve had late fees several times due only to me being “out of cycle”. I would pay every month, but during the wrong window, and consequently the late fee.

I’ve found that if you call and ask “can you please reverse this, I don’t want to pay this fee”, they will always reverse it out, although usually along with a little scolding voice.

The secret is to not do it too many times, or too often!

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Chris

11 years ago

If I was rich, I would buy buy really expensive ketchups with it. That’s right, all the fanciest Dijon ketchups!

(someone should write a song with those lyrics….:)

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Hi! I’m J.D. Roth. I'm here to help you master your money — and your life.

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